U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended December 31, 2001

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

From the transition period from _________________ to ___________________

Commission File Number 001-14015

                             U.S. HOME & GARDEN INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                         77-0262908
(State or other jurisdiction                             IRS Employer
of incorporation or organization)                    (Identification Number)


655 Montgomery Street
San Francisco, California                                     94111
(Address of Principal Executive Offices)                    (Zip Code)

                                 (415) 616-8111
              (Registrant's Telephone Number, Including Area Code)

Indicate by check whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes [X]  No [_]

Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

As of February 4, 2002 there were 17,543,379 shares of the issuer's common
stock, par value $.001 per share, outstanding.

<PAGE>

Part I. -   Financial Information

Item 1. -   Consolidated Financial Statements

Consolidated balance sheets as of December 31, 2001 (Unaudited)             3-4
and June 30, 2001

Consolidated statements of loss for the three months and six months
ended December 31, 2001 and 2000 (Unaudited)                                  5

Consolidated statements of cash flows for the six months                    6-7
ended December 31, 2001 and 2000 (Unaudited)

Notes to consolidated financial statements                                 8-13

Item 2. -   Management's Discussion and Analysis of Financial
Condition and Results of Operations                                       14-19

Item 3. -   Quantitative and Qualitative Disclosures About Market Risk       19

Part II. -  Other Information

Item 1. -   Legal Proceedings                                                20

Item 2. -   Change in Securities and use of Proceeds                         20

Item 6. -   Exhibits and Reports on Form 8-K                              20-21

Signatures                                                                   21


                                                                               2
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                                Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                           December 31, 2001     June 30, 2001
                                                                           -----------------    ----------------
                                                                              (Unaudited)
<S>                                                                          <C>                <C>
Assets

Current
    Cash and cash equivalents                                                $         --       $    2,724,000
    Accounts receivable, less allowance for doubtful
        accounts and sales returns of $1,034,000 and $1,260,000                   9,510,000         19,483,000
    Inventories                                                                  11,249,000         11,043,000
    Prepaid expenses and other current assets                                     1,024,000            697,000
    Refundable income taxes                                                         653,000            653,000
    Deferred tax asset                                                            1,205,000          1,205,000
    Net current assets of discontinued operations                                      --              371,000
----------------------------------------------------------------------------------------------------------------

Total Current Assets                                                             23,641,000         36,176,000

Property and Equipment, net                                                       5,633,000          5,994,000

Intangible Assets
    Excess of cost over net assets acquired, net                                 59,632,000         59,632,000
    Deferred financing costs, net of accumulated
        amortization of $384,000 and $562,000                                     3,581,000          3,001,000
    Non-compete agreements, net of accumulated
        amortization of $228,000 and $132,000                                     1,282,000          1,378,000
    Package tooling costs, net of accumulated
        amortization of $1,648,000 and $1,390,000                                 1,297,000          1,371,000
    Product rights, patents and trademarks, net of
        accumulated amortization of $105,000 and $85,000                            574,000            559,000

Officer Receivables                                                                 541,000            521,000

Net Long-Term Assets of Discontinued Operations                                     117,000               --

Other Assets                                                                         26,000            304,000
----------------------------------------------------------------------------------------------------------------

Total Assets                                                                 $   96,324,000     $  108,936,000
================================================================================================================
</TABLE>

               See accompanying notes to consolidated financial statements.


                                                                               3
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                                Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                           December 31, 2001     June 30, 2001
                                                                           -----------------    -----------------
                                                                             (Unaudited)
<S>                                                                        <C>                  <C>
Liabilities and Stockholders' Equity
Current
    Lines-of-credit                                                        $          --        $    21,650,000
    Accounts payable                                                             7,408,000            3,293,000
    Accrued rebates                                                                855,000            1,618,000
    Accrued freight                                                                813,000              434,000
    Accrued commissions                                                            649,000            1,279,000
    Accrued co-op advertising                                                      437,000              732,000
    Accrued restructuring costs                                                     93,000              999,000
    Accrued expenses                                                               722,000            1,285,000
    Current portion of bank term loan                                              400,000                 --
-----------------------------------------------------------------------------------------------------------------
Total Current Liabilities                                                       11,377,000           31,290,000

Revolving Credit Facility                                                        5,840,000
Long Term Debt                                                                   7,428,000                 --
Deferred Tax Liability                                                           1,205,000            1,205,000
Net Long-Term Liabilities of Discontinued Operations                                  --                263,000
Other Long Term Liabilities                                                           --                 20,000
Company Obligated Mandatorily Redeemable
    Preferred Securities of Subsidiary Trust Holding
    Solely Junior Subordinated Debentures                                       56,951,000           56,951,000
-----------------------------------------------------------------------------------------------------------------
Total Liabilities                                                               82,801,000           89,729,000
-----------------------------------------------------------------------------------------------------------------
Minority Interest in Equity of Affiliate                                         1,239,000            1,239,000
-----------------------------------------------------------------------------------------------------------------

Stockholders' Equity
    Preferred stock, 1,000,000 shares authorized and unissued                         --                   --
    Common stock, $0.001 par value - shares authorized,
        75,000,000; 21,433,000 shares issued at June 30, 2001
           and December 31, 2001                                                    21,000               21,000
    Additional paid-in capital                                                  52,308,000           51,846,000
    Retained deficit                                                           (27,217,000)         (21,071,000)
-----------------------------------------------------------------------------------------------------------------
                                                                                25,112,000           30,796,000

Less: Treasury Stock, 3,890,000 shares
    at cost at June 30, 2001 and December 31, 2001                             (12,828,000)         (12,828,000)
-----------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity                                                      12,284,000           17,968,000
-----------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders Equity                                  $    96,324,000      $   108,936,000
=================================================================================================================
</TABLE>

               See accompanying notes to consolidated financial statements.


                                                                               4
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                        Consolidated Statements of Net Loss

================================================================================

<TABLE>
<CAPTION>
                                                                            Three Months Ended               Six Months Ended
                                                                               December 31,                     December 31,
                                                                       -------------------------------------------------------------
                                                                               2001            2000            2001            2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                               Unaudited                        Unaudited
                                                                       -------------------------------------------------------------
<S>                                                                    <C>             <C>             <C>             <C>
Net sales                                                              $ 11,639,000    $ 11,359,000    $ 25,289,000    $ 24,470,000
Cost of Sales                                                             7,168,000       7,384,000      15,322,000      16,115,000
------------------------------------------------------------------------------------------------------------------------------------
Gross Profit                                                              4,471,000       3,975,000       9,967,000       8,355,000
------------------------------------------------------------------------------------------------------------------------------------
Operating Expenses
    Selling and shipping                                                  3,422,000       3,289,000       7,452,000       6,856,000
    General and administrative                                            2,124,000       1,747,000       4,266,000       3,460,000
    Depreciation                                                            190,000         225,000         374,000         487,000
    Goodwill amortization                                                        --         713,000              --       1,429,000
    Other amortization                                                       66,000         100,000         260,000         277,000
    Write off of deferred financing costs                                   254,000              --         254,000              --
------------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses                                                  6,056,000       6,074,000      12,606,000      12,509,000
------------------------------------------------------------------------------------------------------------------------------------
Loss from Operations                                                     (1,585,000)     (2,099,000)     (2,639,000)     (4,154,000)
Other Income (Expense)
    Investment income                                                        27,000          35,000          70,000          99,000
    Interest expense                                                     (1,767,000)     (1,764,000)     (3,577,000)     (3,424,000)
------------------------------------------------------------------------------------------------------------------------------------
Loss from Continuing Operations Before
    Income Taxes and Extraordinary Gain                                  (3,325,000)     (3,828,000)     (6,146,000)     (7,479,000)
Income Tax Benefit                                                               --       1,808,000              --       3,587,000
------------------------------------------------------------------------------------------------------------------------------------
Loss from Continuing Operations Before
    Extraordinary Gain                                                   (3,325,000)     (2,020,000)     (6,146,000)     (3,892,000)
Discontinued Operations -
    Loss from discontinued operations net of tax benefit of
    $1,262,000 and $2,449,000, respectively, and minority
    interest of $209,000 and $426,000, respectively,
    in 2000                                                                      --        (977,000)             --      (1,860,000)
------------------------------------------------------------------------------------------------------------------------------------
Net Loss Before Extraordinary Gain                                       (3,325,000)     (2,997,000)     (6,146,000)     (5,752,000)
Extraordinary gain on purchase of Trust
Preferred Securities, net of income taxes                                        --              --              --           4,000
------------------------------------------------------------------------------------------------------------------------------------
Net Loss                                                               $ (3,325,000)   $ (2,997,000)   $ (6,146,000)   $ (5,748,000)
------------------------------------------------------------------------------------------------------------------------------------
Per Share Amounts:
Weighted Average Common Shares
    Outstanding- Basic and Diluted                                       17,543,000      18,313,000      17,543,000      18,493,000
Loss from Continuing Operations per Common Share Before
Extraordinary
    Gain - Basic and Diluted                                                  ($.19)          ($.11)          ($.35)          ($.21)
Discontinued operations                                                          --            (.05)             --            (.10)
Extraordinary gain                                                               --              --              --              --
------------------------------------------------------------------------------------------------------------------------------------
Net Loss                                                                      ($.19)          ($.16)          ($.35)          ($.31)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

               See accompanying notes to consolidated financial statements.


                                                                               5
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                      Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Six months ended December 31,                                                  2001                2000
--------------------------------------------------------------------------------------------------------
                                                                                 Unaudited
                                                                      ----------------------------------
<S>                                                                   <C>                 <C>
Cash Flows from Operating Activities:
    Net loss from continuing operations before
        extraordinary gain                                            $  (6,146,000)      $  (3,892,000)
    Adjustments to reconcile net loss to net cash used
        in operating activities:
        Depreciation and amortization                                     1,429,000           3,084,000
        Write off of deferred financing costs                               254,000                  --
        Extraordinary gain                                                       --              (4,000)
        Compensation related to stock options                                60,000             160,000
        Changes in operating assets and liabilities, net
         of assets acquired and liabilities assumed:
           Accounts receivable                                            9,973,000           8,688,000
           Inventories                                                     (206,000)         (5,680,000)
           Prepaid expenses and other current assets                       (327,000)           (242,000)
           Accounts payable and accrued expenses                          1,317,000          (5,912,000)
           Other assets                                                     278,000              56,000
--------------------------------------------------------------------------------------------------------

Net Cash Provided By (Used In) Operating Activities                       6,632,000          (3,742,000)
--------------------------------------------------------------------------------------------------------

Cash Flows for Investing Activities:
    Payment for purchase of business, net of
        cash acquired                                                            --             (27,000)
    Increase in officer receivables                                         (20,000)            (52,000)
    Purchase of property and equipment                                     (577,000)           (663,000)
    Purchase of intangibles                                                (219,000)           (236,000)
--------------------------------------------------------------------------------------------------------

Net Cash Used in Investing Activities                                      (816,000)           (978,000)
========================================================================================================
</TABLE>

               See accompanying notes to consolidated financial statements.


                                                                               6
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                      Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Six months ended December 31,                                                       2001                2000
-------------------------------------------------------------------------------------------------------------
                                                                                       Unaudited
                                                                         ------------------------------------
<S>                                                                       <C>                 <C>
Cash Flows from Financing Activities:
    (Payments)/proceeds on lines-of-credit                                $  (15,810,000)     $   11,000,000
    Proceeds from long term debt                                               8,263,000                --
    Deferred finance costs                                                      (951,000)               --
    Principal payments on long-term debt                                         (33,000)               --
    Repurchase of common stock for treasury                                         --            (1,927,000)
    Purchase of mandatorily redeemable preferred securities                         --               (22,000)
    Other                                                                           --               114,000
-------------------------------------------------------------------------------------------------------------
Net Cash Provided By (Used) In Financing Activities                           (8,531,000)          9,165,000
-------------------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents from
    continuing operations                                                     (2,715,000)          4,445,000
Cash used in discontinued operations                                              (9,000)         (7,006,000)
-------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                     (2,724,000)         (2,561,000)

Cash and Cash Equivalents, beginning of period                                 2,724,000           3,474,000
-------------------------------------------------------------------------------------------------------------

Cash and Cash Equivalents, end of period                                  $         --        $      913,000
-------------------------------------------------------------------------------------------------------------
Supplemental disclosure of Cash Flow
Information
    Cash paid for interest                                                $    3,212,000      $    3,190,000
    Cash paid for taxes                                                   $      219,000      $      (14,000)
-------------------------------------------------------------------------------------------------------------

Non-Cash Investing and Financing Activities
    Issuance of 16% subordinated notes at
       90% of face amount                                                 $      600,000      $         --
    Issuance of warrants and options in
       conjunction with debt refinancing                                  $      402,000      $         --
=============================================================================================================
</TABLE>

               See accompanying notes to consolidated financial statements.


                                                                               7
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


1.   The accompanying consolidated financial statements at December 31, 2001 and
     for the three months and six months ended December 31, 2001 and 2000 are
     unaudited, but, in the opinion of management, include all adjustments
     necessary for a fair presentation of consolidated financial position and
     results of operations for the periods presented. The results for the six
     months ended December 31, 2001 are not necessarily indicative of the
     results of operations for a full year. Certain amounts as previously
     reported have been reclassified to conform to current year classifications.

2.   Refer to the audited consolidated financial statements for the year ended
     June 30, 2001, for details of accounting policies and detailed notes to the
     consolidated financial statements.

3.   Inventories consist of:

                                  December 31, 2001        June 30, 2001
     -------------------------------------------------------------------

     Raw materials                     $  5,427,000         $  6,290,000
     Finished goods                       5,822,000            4,753,000
     -------------------------------------------------------------------

                                       $ 11,249,000         $ 11,043,000
     ===================================================================

4.   On November 15, 2001, the Company secured financing from a bank to provide
     up to $33,000,000 in senior secured financing due three years from the
     closing date. The financing provides for a $31,000,000 revolving credit
     facility and a $2,000,000 term loan due in monthly installments of $33,000
     plus interest. The term loan balance outstanding, net of current portion of
     $400,000, of $1,566,000 is included in long term debt. Interest on
     borrowings is calculated at variable annual rates based on either the
     bank's prime rate plus an applicable marginal rate or the federal funds
     rate plus an applicable marginal rate (effectively 5.25% at December 31,
     2001). Borrowings on the revolving credit facility are limited based on
     eligible borrowing bases. The bank has a first priority perfected security
     interest in substantially all of the Company's assets.

     The Company's obligations under the Revolving Credit Facility are
     guaranteed by its subsidiaries and secured by a security interest in favor
     of the Bank in substantially all of the assets of the Company and its
     subsidiaries. Upon the occurrence of an event of default as specified in
     the Financing Agreement, the maturity of loans outstanding under the
     Financing Agreement may be accelerated by the Bank, which may also
     foreclose its security interest on the assets of the Company and its
     subsidiaries.

     During the three months ended December 31, 2001, the Company borrowed
     $5,847,000, net of discounts of $1,002,000, pursuant to subordinated
     secured notes due six years from the closing date with an effective
     interest rate of 18.4%. The discounts at December 31, 2001, were $988,000.
     Interest is charged on the face of the notes at 16% and 14% per annum,
     payable monthly. The issue price of the 16% notes was 90% of the face
     amount of the notes resulting in a discount of $600,000. The notes are
     secured by a second lien on all assets of the Company and rank junior to
     the senior financing provided by the bank. In connection with this
     financing,


                                                                               8
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


     the company issued to the Purchasers of the notes warrants to purchase up
     to 3.75% of the fully diluted common stock of the Company and granted to
     the Purchasers an option to purchase from the Company certain Trust
     Preferred Securities of the Company's subsidiary, U.S. Home & Garden Trust
     I, that are owned by the Company, which resulted in a discount of $402,000.
     The Company is required to pay certain fees and is subject to certain
     restrictions.

     Under the two financing agreements, the Company and its subsidiaries are
     required, among other things, to comply with (a) certain limitations on
     incurring additional indebtedness, liens and guaranties, on dispositions of
     assets, payment of cash dividends and cash redemption and repurchases of
     securities, and (b) certain limitations on mergers, liquidations, changes
     in business, investments, loans and advances, affiliate transactions and
     certain acquisitions. In addition, the Company must comply with certain
     financial tests and ratios. A violation of any of these covenants
     constitutes an event of default under the financing agreements. At December
     31, 2001, the Company was in compliance with the financial covenants.

5.   In June 2001, the Company announced that it was discontinuing its
     e-commerce initiative, which it was conducting through its subsidiary,
     Egarden, Inc. (Egarden), effective June 30, 2001. During the year ended
     June 30, 2001, the Company recorded a net loss on disposal of discontinued
     operations of $4,551,000, net of minority interest of $1,118,000. The loss,
     prior to minority interest, included the write-off of all long-lived assets
     of $5,224,000 and severance expense of $445,000 related to the termination
     of all 39 employees. Approximately $106,000 of severance payments are
     unpaid at December 31, 2001. No adjustments were made to the liability
     recorded for severance payments during the period ended December 31, 2001.
     The Company had a net loss from the operations of Egarden of $977,000, and
     $1,860,000 net of minority interest of $209,000 and $426,000 for the three
     months and six months ended December 31, 2000. Revenues of the discontinued
     operations for the three months and six months ended December 31, 2000 were
     not material.

     The net assets and liabilities of discontinued operations reported in the
     consolidated balance sheets consisted of the following:

<TABLE>
<CAPTION>
                                                          December 31,           June 30,
                                                              2001                 2001
     --------------------------------------------------------------------------------------
<S>                                                      <C>                  <C>
     Current assets                                      $     106,000        $     882,000
     Current liabilities                                      (106,000)            (511,000)
     --------------------------------------------------------------------------------------
     Net current assets                                  $        --          $     371,000
     ======================================================================================

     Net long-term liabilities                           $     117,000        $    (263,000)
     ======================================================================================

     Minority interest in equity of affiliate            $  (1,239,000)       $  (1,239,000)
     ======================================================================================
</TABLE>


                                                                               9
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


     Pursuant to APB Opinion No. 30, Reporting the Results of Operations -
     Reporting the Effects of Disposal of a Segment of a Business, and
     Extraordinary, Unusual and Infrequently Occurring Events and Transactions,
     the Company's consolidated financial statements and notes have been
     restated for all periods presented to reflect the discontinuation of
     Egarden. The net operating results, net assets and net cash flows of
     Egarden have been reported as "Discontinued Operations" in the accompanying
     consolidated financial statements. The restated notes exclude amounts
     related to these discontinued operations.

6.   During the fiscal year ended June 30, 2001, the Company recorded a
     restructuring charge of $2,860,000 relating to the closing and sale of its
     subsidiary's Ampro Industries Inc. facility in Michigan. The Company
     intends to continue to sell products, through a contract manufacturing
     agreement, being manufactured at the former Ampro facility. As part of this
     agreement, the Company has a firm commitment to purchase minimum quantities
     of product in the fiscal year ended June 30, 2002. However, the contract
     includes an exit provision, whereby the maximum cost to the Company of
     termination of the agreement is $332,000. As of December 31, 2001, the
     Company has purchased approximately $405,000 of product from the
     subcontractor. During the period ended June 30, 2001, the Company
     recognized approximately $1,709,000 of expenses and losses relating to the
     closing and sale of property and equipment of the Ampro facility and
     $1,151,000 for termination benefits to be paid to all 60 former employees
     at the Ampro facility. Approximately $93,000 of severance payments as a
     result of the restructuring were unpaid as of December 31, 2001. All
     payments are expected to be completed by June 30, 2002. No adjustments were
     made to the liability recorded for severance payments during the six months
     ended December 31, 2001.

7.   In June 2001, the Financial Accounting Standards Board (FASB) finalized
     Statement of Financial Accounting Standards (SFAS) No. 141, Business
     Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS
     No. 141 requires the use of the purchase method of accounting and prohibits
     the use of the pooling-of-interest method of accounting for business
     combinations initiated after June 30, 2001. SFAS No. 141 also requires that
     the Company recognize acquired intangible assets apart from goodwill if the
     acquired intangible assets meet certain criteria. SFAS No. 141 applies to
     all business combinations initiated after June 30, 2001 and for purchase
     business combinations completed on or after July 1, 2001. SFAS No. 141 also
     requires, upon adoption of SFAS No. 142, that the Company reclassify the
     carrying amounts of goodwill and other intangible assets based on the
     criteria of SFAS No. 141.

     SFAS No. 142 requires, among other things, that companies no longer
     amortize goodwill, but instead test goodwill for impairment at least
     annually. In addition, SFAS No. 142 requires that the Company identify
     reporting units for the purpose of assessing potential future impairments
     of goodwill, reassess the useful lives of other existing recognized
     intangible assets, and cease amortization of intangible assets with an
     indefinite useful life. An intangible asset with an indefinite useful life
     should be tested for impairment in accordance with the guidelines in SFAS
     No. 142. SFAS No. 142 is required to be applied in fiscal years beginning
     after December 15, 2001 to all goodwill and other intangible assets
     recognized at that date, regardless of when those assets were initially
     recognized.


                                                                              10
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


SFAS No. 142 requires the Company to complete a two-step transitional goodwill
impairment test, with the first step to be completed within six months of the
date of adoption. The first step, used to identify potential impairment,
compares the fair value of a reporting unit with its carrying value. If it is
determined that the carrying value of the net assets of the reporting unit
(including goodwill) exceeds the fair value of that reporting unit, the second
step must be performed as soon as possible, but no later than the end of the
year of initial adoption, to measure the amount of the impairment loss, if any.
An impairment loss resulting from the transitional goodwill impairment test is
recognized as the effect of a change in accounting principle.

The Company has elected to adopt SFAS No. 141 and SFAS No. 142, effective July
1, 2001. The adoption of SFAS No. 141 had no effect on the Company's financial
statements for the six months ended December 31, 2001 as the Company engaged in
no business acquisitions during this period and there were no reclassifications
between goodwill and other intangible assets. During the three months ended
September 30, 2001, the Company completed a reassessment of the useful lives of
other intangible assets which total $6,734,000 (net of accumulated amortization
of $2,365,000) at December 31, 2001. As a result, no adjustments were made to
previously determined amortization periods. The Company has no intangible assets
with indefinite useful lives at December 31, 2001.

The Company completed step one of the SFAS No. 142 transitional goodwill
impairment test during the quarter ended December 31, 2001. The carrying value
of the net assets of the Ampro reporting unit exceeds its fair value. Goodwill
associated with the purchase of Ampro was approximately $17,078,000, net of
accumulated amortization, at December 31, 2001. As disclosed at June 30, 2001,
the Company restructured the operations of Ampro during the year ended June 30,
2001. This restructuring included the closing and sale of the Ampro facility in
Michigan. The Company currently continues to sell Ampro products, through a
contract manufacturing agreement, being manufactured at the former Ampro
facility. This restructuring is currently being considered by the Company in
conjunction with the transitional goodwill impairment test being completed. Step
two of the transitional goodwill impairment test will be completed as soon as
possible to measure the impairment loss, with the loss recorded no later than
June 30, 2002.

The Company's previous business combinations were accounted for using the
purchase method. As a result of such combinations, the Company has recognized a
significant amount of goodwill, which, in the aggregate, was approximately
$59,632,000, net of accumulated amortization, at December 31, 2001. Amortization
expense for all intangible assets during the six months ended December 31, 2001
and 2000 was $514,000 and $2,114,000, respectively. Estimated amortization
expense for each of the five succeeding fiscal years is as follows:

           Year Ended June 30,
           --------------------------------------------------

           2002                                   $ 1,478,000
           2003 - 2004                            $ 1,468,000
           2005                                   $ 1,288,000
           2006                                   $ 1,108,000


                                                                              11
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


The following represents a reconciliation of the reported net loss to the
adjusted net loss and the adjusted net loss before extraordinary gain for the
three months and the six months ended December 31, 2000, which exclude goodwill
amortization expense, net of tax benefit:

<TABLE>
<CAPTION>
                                                            Three Months Ended   Six Months Ended
                                                            --------------------------------------
                                                                        December 31, 2000
        ------------------------------------------------------------------------------------------
<S>                                                               <C>                <C>
        Reported Net Loss                                         $ (2,997,000)      $ (5,748,000)
        Goodwill amortization, net of tax benefit of
        $383,000 and $774,000                                          401,000            793,000
        ==========================================================================================
        Adjusted Net Loss                                           (2,596,000)        (4,955,000)
        Extraordinary gain                                                                  4,000
        ==========================================================================================
        Adjusted Net Loss Before Extraordinary Gain               $ (2,596,000)      $ (4,959,000)
        ==========================================================================================
        Per Share Amounts:
        Reported Net Loss                                         $       (.16)      $       (.31)
        Goodwill amortization, net of tax benefit                          .02                .04
        ==========================================================================================
        Adjusted Net Loss                                                 (.14)              (.27)
        Extraordinary gain                                                  --                 --
        ==========================================================================================
        Adjusted Net Loss Before Extraordinary Gain
                                                                  $       (.14)      $       (.27)
        ==========================================================================================
</TABLE>

8.   In the normal course of business, the Company is subject to proceedings,
     lawsuits, and other claims, including proceedings under laws and government
     regulations related to product safety and other matters. Such matters are
     subject to many uncertainties, and outcomes are not predictable with
     assurance. Consequently, the ultimate amount of monetary liability or
     financial impact with respect to these matters at December 31, 2001 cannot
     be ascertained.

     During fiscal 2001, the U.S. Consumer Product Safety Commission ("CPSC")
     began an investigation into a product previously distributed by the
     Company's Weed Wizard subsidiary. This investigation could result in an
     adverse outcome for the Company. While the amount of loss cannot be
     reasonably estimated at this time, the approximate maximum potential loss
     is $1.6 million. The Company has vigorously defended, and will continue to
     vigorously defend, its actions with respect to this subsidiary and its
     discontinued product.


                                                                              12
<PAGE>

                                   U.S. Home & Garden Inc. and Subsidiaries

                                 Notes to Consolidated Financial Statements

================================================================================


In fiscal 2001, the Company commenced an action against A.A.B.B., Inc. (formerly
known as Weed Wizard, Inc.) and certain stockholders and officers relating to
the purchase from the defendants of substantially all of the assets of Weed
Wizard, Inc. by the Company. The Company is seeking to rescind the transaction
or to recover monetary damages. A.A.B.B., Inc. has asserted a counterclaim for
breach of contract against the Company for $720,000, plus interest, representing
an alleged adjustment to the purchase price.

During the six months ended December 31, 2001, the Company was notified by the
staff of the CPSC that a cap on one of the Company's products sold prior to June
30, 2000 was found to be defective. The Company recently agreed to a voluntary
corrective action providing replacement caps for earlier versions of the caps.
Costs related to the voluntary corrective action are not expected to be
significant.


                                                                              13
<PAGE>


Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Report
contains statements that are forward-looking, such as statements relating to
plans for the Company's future activities. Such forward-looking information
involves important known and unknown risks and uncertainties that could
significantly affect actual results, performance or achievements in the future
and, accordingly, such actual results, performance or achievements may
materially differ from those expressed or implied in any forward-looking
statements made by or on behalf of the Company.

These risks and uncertainties include, but are not limited to, those relating to
the Company's growth strategy, customer concentration, outstanding indebtedness,
dependence on weather conditions, seasonality, expansion and other activities of
competitors, ability to successfully integrate acquired companies and product
lines, changes in federal or state environmental laws and the administration of
such laws, protection of trademarks and other proprietary rights, litigation,
and the general condition of the economy and its effect on the securities
markets and other risks detailed in the Company's other filings with the
Securities and Exchange Commission. The words "believe," "expect," "anticipate,"
"intend" and "plan" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made.

General

U.S. Home & Garden Inc., ("the Company"), manufactures and markets a broad range
of brand-name consumer lawn and garden products through its wholly owned
subsidiaries, Ampro Industries, Inc. ("Ampro"), Easy Gardener, Inc. ("Easy
Gardener"), and Golden West Agri-Products, Inc., and Easy Gardener's wholly
owned subsidiaries, Weatherly Consumer Products Group, Inc. and Weed Wizard
Acquisition Corp. Since 1992, the Company consummated eleven acquisitions of
complementary lawn and garden companies and product lines for an aggregate
consideration of approximately $111,000,000 in cash, notes and equity
securities. As a result of such acquisitions, the Company recognized a
significant amount of goodwill, which, in the aggregate, was approximately
$59,632,000, net of accumulated amortization, at June 30, 2001 and December 31,
2001.

Results of Operations

The following table sets forth, for the periods indicated, certain selected
financial data as a percentage of net sales:

<TABLE>
<CAPTION>
                                                Three Months Ended            Six Months Ended
                                                    December 31,                December 31,
                                                    ------------                ------------
                                                 2001          2000          2001          2000
<S>                                             <C>           <C>           <C>           <C>
Net sales                                       100.0%        100.0%        100.0%        100.0%
Cost of sales                                    61.6          65.0          60.6          65.9
                                               ---------------------       ---------------------
Gross profit                                     38.4          35.0          39.4          34.1
Selling and shipping expenses                    29.4          29.0          29.4          28.0
General and administrative expenses              18.2          15.4          16.9          14.1
Depreciation and amortization                     4.4           9.1           3.5           9.0
                                               ---------------------       ---------------------
Income (loss) from operations                   (13.6)        (18.5)        (10.4)        (17.0)
Interest expense, net                           (14.9)        (15.2)        (13.9)        (13.6)
Income tax benefit                                 --          15.9            --          14.7
                                               =================================================
Loss from continuing operations                 (28.5)        (17.8)        (24.3)        (15.9)
Loss from discontinued operations                  --          (8.6)           --          (7.6)
                                               =================================================
Net loss                                        (28.5)%       (26.4)%       (24.3)%       (23.5)%
                                               ======================      =====================
</TABLE>


                                                                              14
<PAGE>


Three Months Ended December 31, 2001 Compared to Three Months Ended December 31,
2000

Net sales. Net sales increased by $280,000, or 2.5%, to $11,639,000 during the
three months ended December 31, 2001 from $11,359,000 during the comparable
period in 2000. The increase in net sales was a result of growth in sales of
core products primarily to home center customers.

Gross profit. Gross profit increased by $496,000, or 12.5%, to $4,471,000 for
the three months ended December 31, 2001 from $3,975,000 during the comparable
period in 2000. Gross profit as a percentage of net sales increased to 38.4%
during the three months ended December 31, 2001, from 35.0% during the
comparable period in 2000. This increase in gross profit as a percentage of net
sales is due to a decrease in cost of sales as a result of the restructuring and
closing of the Bradley, Michigan facility, a reduction in certain raw material
costs, and increased operating efficiencies.

Selling and shipping expenses. Selling and shipping expenses increased by
$133,000, or 4.0% to $3,422,000 during the three months ended December 31, 2001
from $3,289,000 during the comparable period in 2000. As a percentage of net
sales, selling and shipping expenses increased to 29.4% during the three months
ended December 31, 2001 from 29.0% during the comparable period in 2000. This
increase in expense and increase as a percent of net sales was primarily
attributable to increases in outbound freight.

General and administrative expenses. General and administrative expenses
increased by $377,000 or 21.6%, to $2,124,000 during the three months ended
December 31, 2001 from $1,747,000 during the comparable period in 2000. This
increase is primarily due to the allocation of certain costs in the prior year
to the discontinued startup operations of Egarden. All general and
administrative costs during the three months ended December 31, 2001 were
charged to continuing operations. As a percentage of net sales, general and
administrative expenses increased to 18.2% during the three months ended
December 31, 2001 from 15.4% during the comparable period in 2000.

Depreciation, amortization, and write off of deferred financing costs.
Depreciation, amortization, and write-off of deferred financing costs expenses
decreased by $528,000 or 50.9% to $510,000 during the three months ended
December 31, 2001 from $1,038,000 during the comparable period in 2000. This
decrease is primarily a result of the adoption of SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142") in July 2001. SFAS 142 requires, among
other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually. Goodwill amortization was also
reduced by the write off of Weed Wizard goodwill at June 30, 2001. The decrease
in depreciation and amortization expenses was mitigated somewhat by the write
off of deferred financing costs in conjunction with the restructuring of the
Company's debt during the quarter. As a percentage of net sales, depreciation,
amortization, and write off of deferred financing costs decreased to 4.4% during
the three months ended December 31, 2001 from 9.1% during the comparable period
in 2000.

Loss from operations. Loss from operations decreased by $514,000 or 24.5% to
$1,585,000 during the three months ended December 31, 2001, from $2,099,000
during the comparable period in 2000. The decrease in loss from operations was
primarily due to increased gross profit and other expense changes noted above.
As a percentage of net sales, loss from operations decreased to 13.6% for the
three months ended December 31, 2001 from 18.5% during the comparable period in
2000.

Interest expense, net. Net interest expense increased $11,000, or .6% to
$1,740,000 during the three months ended December 31, 2001, from $1,729,000
during the comparable period in 2000. The slight increase in interest expense
results from higher interest rates prior to the refinancing of the revolving
credit facility offset by reductions in the borrowing levels.


                                                                              15
<PAGE>

Income taxes. Income tax benefit decreased to $0 during the three months ended
December 31, 2001 from $1,808,000 during the comparable period in 2000. The
income tax benefit for each interim period is based upon the Company's estimated
effective income tax rate for the year. No income tax benefit was recorded for
the three months ended December 31, 2001, due to a valuation allowance
established for the full amount of the deferred tax asset generated during the
three months ended December 31, 2001.

Discontinued Operations. Loss from discontinued operations decreased by $977,000
to $0 during the three months ended December 31, 2001, from the comparable
period in 2000. The decrease in loss from discontinued operations is due to the
Company's decision to discontinue the operations of Egarden, Inc. during the
quarter ended June 30, 2001.

Net loss. Net loss increased by $328,000 to $3,325,000 during the three months
ended December 31, 2001 from a net loss of $2,997,000 during the comparable
period in 2000. Net loss per common share increased to $0.19 per share for the
three months ended December 31, 2001 from net loss of $0.16 per share during the
comparable period in 2000. The increase in net loss and net loss per common
share is due primarily to not reflecting a tax benefit in 2001, largely offset
by the reduced loss from continuing operations due to the factors discussed
above and not having a loss related to the discontinued operations. There were
fewer weighted average common and common equivalent shares outstanding in the
three months ended December 31, 2001 compared to the comparable period in the
prior year due to the Company's repurchase of shares of its common stock in
fiscal 2001.

Six Months Ended December 31, 2001 Compared to Six Months Ended December 31,
2000

Net sales. Net sales increased by $819,000, or 3.3%, to $25,289,000 during the
six months ended December 31, 2001 from $24,470,000 during the comparable period
in 2000. The increase in net sales was a result of growth in sales of core
products primarily to home center customers.

Gross profit. Gross profit increased by $1,612,000, or 19.3%, to $9,967,000 for
the six months ended December 31, 2001 from $8,355,000 during the comparable
period in 2000. Gross profit as a percentage of net sales increased to 39.4%
during the six months ended December 31, 2001, from 34.1% during the comparable
period in 2000. This increase in gross profit as a percentage of net sales is
due to a decrease in cost of sales as a result of the restructuring and closing
of the Bradley, Michigan facility, a reduction in certain raw material costs and
increased operating efficiencies.

Selling and shipping expenses. Selling and shipping expenses increased by
$596,000, or 8.7% to $7,452,000 during the six months ended December 31, 2001
from $6,856,000 during the comparable period in 2000. As a percentage of net
sales, selling and shipping expenses increased to 29.4% during the six months
ended December 31, 2001 from 28.0% during the comparable period in 2000. This
increase in expense and increase as a percent of net sales was primarily
attributable to increases in outbound freight for the six months ended December
31, 2001.

General and administrative expenses. General and administrative expenses
increased by $806,000 or 23.3%, to $4,266,000 during the six months ended
December 31, 2001 from $3,460,000 during the comparable period in 2000. This
increase is primarily due to the allocation of certain costs in the prior year
to the discontinued startup operations of Egarden. All general and
administrative costs during the six months ended December 31, 2001 were charged
to continuing operations. As a percentage of net sales, general and
administrative expenses increased to 16.9% during the six months ended December
31, 2001 from 14.1% during the comparable period in 2000.


                                                                              16
<PAGE>


Depreciation, amortization, and write off of deferred financing costs.
Depreciation, amortization, and write-off of deferred financing costs expenses
decreased by $1,305,000 or 59.5% to $888,000 during the six months ended
December 31, 2001 from $2,193,000 during the comparable period in 2000. This
decrease is primarily a result of the adoption of SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142") in July 2001. SFAS 142 requires, among
other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually. Goodwill amortization was also
reduced by the write off of Weed Wizard goodwill at June 30, 2001. The decrease
in depreciation, amortization, and write off of deferred financing costs was
mitigated somewhat by the write off of deferred financing costs in conjunction
with the restructuring of the Company's debt during the quarter. As a percentage
of net sales, depreciation, amortization, and write-off of deferred financing
costs decreased to 3.5% during the six months ended December 31, 2001 from 9.0%
during the comparable period in 2000.

Loss from operations. Loss from operations decreased by $1,515,000 or 36.5% to
$2,639,000 during the six months ended December 31, 2001, from $4,154,000 during
the comparable period in 2000. The decrease in loss from operations was
primarily due to increased gross profit and other expense changes as noted
above. As a percentage of net sales, loss from operations decreased to 10.4% for
the six months ended December 31, 2001 from 17.0% during the comparable period
in 2000.

Interest expense, net. Net interest expense increased $182,000, or 5.5% to
$3,507,000 during the six months ended December 31, 2001, from $3,325,000 during
the comparable period in 2000. The increase in interest expense results from
higher interest rates prior to the refinancing of the revolving credit facility
offset by reductions in borrowing levels.

Income taxes. Income tax benefit decreased to $0 during the six months ended
December 31, 2001 from $3,587,000 during the comparable period in 2000. The
income tax benefit for each interim period is based upon the Company's estimated
effective income tax rate for the year. No income tax benefit was recorded for
the six months ended December 31, 2001, due to a valuation allowance established
for the full amount of the deferred tax asset generated during the six months
ended December 31, 2001.

Discontinued Operations. Loss from discontinued operations decreased by
$1,860,000 to $0 during the six months ended December 31, 2001, from the
comparable period in 2000. The decrease in loss from discontinued operations is
due to the Company's decision to discontinue the operations of Egarden, Inc.
during the quarter ended June 30, 2001.

Net loss. Net loss increased by $398,000 to $6,146,000 during the six months
ended December 31, 2001 from a net loss of $5,748,000 during the comparable
period in 2000. Net loss per common share increased to $0.35 per share for the
six months ended December 31, 2001 from net loss of $0.31 per share during the
comparable period in 2000. The increase in net loss and net loss per common
share is due primarily to not reflecting a tax benefit in 2001, largely offset
by the reduced loss from continuing operations due to the factors discussed
above and not having a loss related to the discontinued operations. There were
fewer weighted average common and common equivalent shares outstanding in the
six months ended December 31, 2001 compared to the comparable period in the
prior year due to the Company's repurchase of shares of its common stock in
fiscal 2001.


                                                                              17
<PAGE>


Seasonality

The Company's sales are seasonal due to the nature of the lawn and garden
business, in parallel with the annual growing season. The Company's sales and
shipping are most active from late December through May when home lawn and
garden customers are purchasing supplies for spring planting and retail stores
are increasing their inventory of lawn and garden products. Additionally, since
the Company has adjusted its operations to respond more closely to the
just-in-time inventory management programs increasingly utilized by its major
customers, it expects to ship an increasingly larger proportion of its total
orders on an annual basis in the seasonally strong third and fourth quarter of
the fiscal year.

Sales of the Company's agricultural products, which were not material during the
six months ended December 31, 2001, are also seasonal. Most shipments occur
during the agricultural cultivation period from March through October.

Liquidity and Capital Resources

Since inception, the Company has financed its operations primarily through cash
generated by operations, net proceeds from the Company's private placements and
public sales of securities and borrowings from lending institutions.

At  December  31,  2001,  the  Company  had  consolidated  cash  and  short-term
investments totaling $0, and working capital of $12,264,000. Under the Company's
new  credit  facility  all  cash  balances  are  automatically  used  to  reduce
outstanding borrowings.  At June 30, 2001, the Company had consolidated cash and
short-term  investments totaling $2,724,000,  and working capital of $4,886,000.
The increase in working  capital is primarily  attributable to the cash provided
by  operations  utilized to reduce  borrowings  and by the  modification  in the
revolving credit facility allowing balances to be included in long-term debt.

During the three months ended December 31, 2001, the Company secured financing
from a bank to provide up to $33,000,000 in senior secured financing due three
years from the closing date. The financing commitment provides for a $31,000,000
revolving credit facility and a $2,000,000 term loan. Interest on borrowings is
calculated at variable annual rates based on either the bank's prime rate plus
an applicable marginal rate or the federal funds rate plus an applicable
marginal rate (effectively 5.25% at December 31, 2001). Available borrowing on
the revolving credit facility is limited based on eligible borrowing bases. The
bank has first priority perfected security interest in substantially all of the
Company's assets. The Company is subject to certain fees and restrictions in
conjunction with the financing.

During the three months ended December 31, 2001, the Company borrowed
$5,847,000, net of discounts of $1,002,000, pursuant to subordinated secured
notes due six years from the closing date with an effective interest rate of
18.4%. The discounts at December 31, 2001, were $988,000. Interest is charged on
the face of the notes at 16% and 14% per annum, payable monthly. The issue price
of the 16% notes was 90% of the face amount of the notes resulting in a discount
of $600,000. The notes are secured by a second lien on all assets of the Company
and rank junior to the senior financing provided by the bank. In connection with
this financing, the company issued to the Purchasers of the notes warrants to
purchase up to 3.75% of the fully diluted common stock of the Company and
granted to the Purchasers an option to purchase from the Company certain Trust
Preferred Securities of the Company's subsidiary, U.S. Home & Garden Trust I,
that are owned by the Company, which resulted in a discount of $402,000. The
Company is required to pay certain fees and is subject to certain restrictions.

New Accounting Pronouncements

In September 2000, the Emerging Issues Task Force (EITF) issued EITF Issue
00-25, Vendor Income Statement Characterization of Consideration Paid to a
Reseller of the Vendors Products, which requires certain cooperative


                                                                              18
<PAGE>

advertising charges to be classified as a reduction of revenue. This guidance is
effective for fiscal periods beginning after December 15, 2001. Currently, the
Company is assessing but has not yet adopted EITF 00-25.

In August 2001, the Financial Accounting Standards Board finalized SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144
addresses accounting and reporting for the impairment or disposal of long-lived
assets, including the disposal of a segment of business. SFAS No. 144 is
effective for fiscal years beginning after December 15, 2001, and interim
periods within those fiscal years. We are currently reviewing the impact of SFAS
No. 144 on the Company.

In June 2001, the FASB finalized SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires the use of
the purchase method of accounting and prohibits the use of the
pooling-of-interest method of accounting for business combinations initiated
after June 30, 2001. SFAS No. 141 also requires that the Company recognize
acquired intangible assets apart from goodwill if the acquired intangible assets
meet certain criteria. SFAS No. 141 applies to all business combinations
initiated after June 30, 2001 and for purchase business combinations completed
on or after July 1, 2001. It also requires, upon adoption of SFAS No. 142, that
the Company reclassify the carrying amounts of intangible assets and goodwill
based on the criteria of SFAS No. 141.

SFAS No. 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS No. 142 requires that the Company identify reporting units for
the purpose of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS NO. 142. SFAS No. 142 is required to be
applied in fiscal years beginning after December 15, 2001 to all goodwill and
other intangible assets recognized at that date, regardless of when those assets
were initially recognized. SFAS No. 142 requires the Company to complete a
transitional goodwill impairment test six months from the date of adoption. The
Company is also required to reassess the useful lives of other intangible assets
within the first interim quarter after adoption of SFAS No. 142. The Company has
elected to adopt SFAS No. 141 and SFAS No. 142, effective July 1, 2001. See Note
7 to the Consolidated Financial Statements.

Inflation

Inflation has historically not had a material effect on the Company's
operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of its variable rate revolving credit line, the Company is exposed
to the risk of rising interest rates. The following table provides information
on the Company's fixed maturity debt as of December 31, 2001 that are sensitive
to changes in interest rates.

The Revolving Credit Facility had an                             $5.8 million
interest rate of 5.25% for the period ended
December 31, 2001.


                                                                              19
<PAGE>


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     In July 2000, our subsidiary, Weed Wizard Acquisition Corp. ("Weed Wizard")
     commenced an action in the U.S. District Court, Northern District of
     Georgia, against A.A.B.B., Inc. (formerly known as Weed Wizard, Inc.) and
     certain of its stockholders and officers. In this action we allege that the
     defendants made certain misrepresentations and omitted to disclose certain
     facts regarding, among other things, alleged defects in certain of the Weed
     Wizard products in connection with our purchase from defendants in 1998 of
     substantially all of the assets of Weed Wizard, Inc. We are seeking to
     rescind the transaction, or in the alternative, to recover rescissionary
     monetary damages, and to recover compensatory damages. In addition, we are
     seeking punitive damages.

     In October 2000 A.A.B.B., Inc. asserted a counterclaim for breach of
     contract against Weed Wizard alleging that it is owed $720,267, plus
     interest, representing an adjustment to the purchase price allegedly
     required to be made pursuant to the agreement in which Weed Wizard acquired
     certain A.A.B.B., Inc.'s assets. A.A.B.B., Inc. is also seeking to recover
     attorney's fees. We deny any liability and intend to defend this
     counterclaim.

     In fiscal 2001, we were notified by the staff of the U.S. Consumer Product
     Safety Commission ("CPSC") that the staff is considering recommending that
     the CSPC commence an action against Weed Wizard to obtain a monetary fine
     from Weed Wizard for the alleged failure of Weed Wizard to timely disclose
     to the CPSC, pursuant to the Consumer Products Safety Act, certain required
     information concerning Weed Wizard product previously distributed by us
     that was the subject of a voluntary recall during fiscal 2000. We believe
     that the maximum amount of any claim that may be brought by the CSPC will
     not exceed approximately $1.6 million. We intend to defend any claim
     against Weed Wizard or us that may be brought by the CSPC.

Item 2. Change in Securities and Use of Proceeds

     In connection with certain subordinated borrowing in November 2001 the
     Company issued to several accredited investor purchasers (the "Purchasers")
     subordinated secured notes in the principal amount of approximately
     $6,850,000 and issued to the Purchasers warrants to purchase up to 3.75% of
     the fully diluted common stock of the Company and granted to the Purchasers
     an option to purchase from the Company certain Trust Preferred Securities
     of the Company's subsidiary, U.S. Home & Garden Trust I, that are owned by
     the Company. The securities issued to the Purchasers were issued by the
     Company in reliance on the exemption provided by Section 4(2) of the
     Securities Act of 1933.

Item 6. Exhibits and Reports on Form 8-K

(a)     10.1

        Revolving Credit, Term Loan, Guaranty and Security Agreement dated as of
        November 15, 2001 among U.S. Home & Garden Inc., Easy Gardener, Inc.,
        each of the direct or indirect subsidiaries of U.S. Home & Garden Inc.
        which are signatories to the Credit Agreement), the financial
        institutions which are a party to the Credit Agreement, and PNC Bank,
        National Association, as agent for the lenders.

        10.2

        Note and Warrant Purchase, Guaranty and Security Agreement dated as of
        November 15, 2001 among, U.S. Home & Garden, Inc. Easy Gardener, Inc.
        each of the direct or indirect subsidiaries of U.S. Home & Garden Inc.
        which are signatories to the Note and Warrant


                                                                              20
<PAGE>

        Purchase Agreement and the purchasers listed on the signature page of
        the Note and Warrant Purchase Agreement.

(b)     No reports on Form 8-K were filed during the quarter ended December 31,
        2001.


                                   SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

February 14, 2002

    U.S. Home & Garden Inc.

                                                                (Registrant)



                                         By:  /s/ Robert Kassel
                                         -------------------------------------
                                         President, Chief Executive Officer


                                         By:  /s/ Richard Kurz
                                         -------------------------------------
                                         Chief Financial Officer



                                                                              21